State Tax Rulings
Free state tax letter rulings and advisory opinions with plain-English summaries, full citations, and the original source on every page.
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Could a Virginia resident claim an out-of-state tax credit for wage withholding that the other state fully refunded?
No. The other state's return showed a full refund of the wage withholding, so no tax remained actually paid there. Allowing the same amount as a Virginia credit would create a double benefit. If the o…
Did a temporary State Department assignment abroad make a Virginia couple nonresidents and allow them to exclude the husband's overseas income?
No. The couple kept their permanent Virginia home, voter registrations, vehicles, licenses, and intent to return, so the temporary overseas posting did not end domicile. Virginia taxed the husband's f…
Did Virginia have to allow a conservation-contribution deduction equal to all federal adjusted gross income when the IRS allowed only 50%?
No. Virginia itemized deductions followed the amount accepted federally, and the IRS record showed the qualified conservation deduction was reduced from 100% to 50% of federal adjusted gross income. T…
Did a Virginia partner's Maryland Schedule E professional income and interest qualify for Virginia's full border-state tax credit?
No. The husband's distributive partnership income reported on Schedule E was business income, not earned income or Schedule C business income for the special border-state rule. His Maryland-source int…
Could a taxpayer obtain full Virginia refunds for 2009-2013 by claiming foreign domicile after filing 2009 late and retaining strong Virginia ties?
No. The 2009 full-refund claim was filed after the three-year deadline, and the two-year assessment-payment exception did not apply because the domicile claim went beyond the IRS-income adjustment ass…
Did an overseas assignment establish foreign domicile when the taxpayer kept a Virginia license, voting and vehicle ties, and intended to return?
No. Although the taxpayer leased a home, licensed vehicles, and obtained a driver's license abroad, he retained Virginia voter and vehicle ties, renewed his Virginia license, claimed he filed Virginia…
Could Virginia consider a dental-practice sales-tax appeal faxed November 25 when the 90-day filing period expired November 20?
No. The August 21 assessments had to be appealed by November 20, 2015 under Virginia's 90-day rules, but the dental practice faxed its challenge on November 25. The Tax Commissioner therefore could no…
Did a for-profit family medical practice need each controlled-drug invoice to name a licensed physician or DEA number to claim Virginia's medical-entity exemption?
No. The physician-name or DEA-number invoice requirement applied to a separate exemption for controlled drugs purchased by an individual licensed practitioner. After the 2006 amendment, a qualifying f…
Must Kansas income tax be withheld on Medicaid waiver payments to a home care provider?
Kansas Notice 15-16 (December 23, 2015) addresses whether Kansas withholding is required on certain Medicaid waiver payments. Under IRS Notice 2014-7, payments to individual care providers for caring …
What did Virginia's 2015 pass-through entity withholding guidelines require for nonresident owners, exemptions, composite returns, filing, and payment?
For taxable years beginning on or after January 1, 2015, a pass-through entity with Virginia-source taxable income generally had to pay withholding equal to 5% of each nonresident owner's allocable sh…
Did timely protective claims produce additional Virginia refunds for the taxpayer's 2010 and 2011 overpayments?
No. The protective claim itself was timely, but the underlying 2010 original return was filed after the three-year refund deadline, so that overpayment could not be refunded. The 2011 refund had alrea…
Did a Virginia LLC with one rental property have to withhold 5% for its nonresident members after fully disclosing every owner?
No. Although Virginia generally requires 5% pass-through withholding on Virginia-source income allocated to nonresident owners, the LLC qualified for the rental exception. It had one Virginia rental p…
Could a military spouse avoid Virginia income tax for 2009 and 2010 by claiming the servicemember's out-of-state domicile?
No. The Department found that the spouse had established Virginia domicile after moving there in 2008. The Servicemembers Civil Relief Act did not let her simply elect her spouse's domicile, and the r…
Who determines a property's value for Virginia recordation tax when an auction price, assessment, and appraisal disagree?
The county circuit-court clerk had to determine the property's actual value after considering the taxpayer's appraisal and other reliable evidence. A recent assessment carried a strong presumption of …
Did buying an out-of-state home and changing a driver's license and voter registration prove that a taxpayer abandoned Virginia domicile?
No. Although the taxpayer bought a home and changed a license, vehicle registration, and voter registration in another state, he retained a jointly owned Virginia home where he stayed, operated his bu…
Did a fourth appraisal and conditional purchase offers justify increasing the claimed value of a Virginia conservation easement?
No. The Tax Commissioner upheld the Department's appraisal and the resulting assessments. The taxpayer's appraisals emphasized physical development potential but did not adequately account for weak co…
Is a Farm Credit System agricultural credit association exempt from Kansas sales tax as a federal land bank or federal instrumentality?
No. The Department concluded that an agricultural credit association (ACA) is neither a federal land bank nor otherwise immune from Kansas tax. Congress did not expressly exempt ACAs, and the associat…
How is Kansas sales tax applied to direct mail advertising — what is taxable, how is it sourced, and which charges are in the tax base?
Direct mail delivered to a Kansas address is taxed as a sale of tangible personal property. The tax base is the total charged for the direct mail minus separately stated delivery charges (postage, pac…
A company uses software in three ways — licensed from foreign affiliates and hosted abroad, subscribed from third-party vendors and hosted out of state, and bought and installed on its own servers in and out of Tennessee. Which of those charges are subject to Tennessee sales and use tax?
It depends on where the software lives and where it's used. (1) Affiliate-hosted software — licensed from foreign affiliates and bundled with hosting, support, and backup for one price — is taxable on…
A company sells data-processing, storage, document, and payment services delivered through web portals, and also sells and buys remotely accessed software used by people in several states. Which of these charges are subject to Tennessee sales and use tax, and how is the multi-state software portion figured?
It depends on what's being sold. The company's six Service Offerings — information management, remote storage, electronic delivery, payment management, and two web-based information services — are all…
Could the Kuriyans recover a $14,957 income-tax refund after two timely claims went unanswered when they did not protest or sue within 210 days of either filing?
No. The Kuriyans timely requested a $14,957 refund on their October 2010 return and again on a December 2013 application the Department sent them. The Department acted on neither claim within 120 days…
What are the required wage and investment levels for Nebraska Advantage Act applications filed on or after January 1, 2016?
This ruling sets the 2016 thresholds. For Nebraska Advantage Act applications filed on or after January 1, 2016, the base average annual wage requirement is $24,711, and the required investment and em…
When a dealer or builder picks up modular home modules at a New York factory, is the sale taxed at the factory's location or at the installation site?
At the factory's location. New York sales tax is a 'destination tax,' but 'destination' means the point where the vendor transfers possession to the buyer (or the buyer's designee) -- not where the go…
What documentation applied when a registered truck-body manufacturer drop-shipped a vehicle to Illinois for an unregistered reseller?
IDOR identified the transaction as the standard drop-shipment pattern and directed the seller to the resale-certificate rules. It did not choose a form or deadline for the seller. It cautioned that Fo…
Did an adult tricycle and electric pedal-assist modification qualify for Illinois' 1% rate for disability modifications to motor vehicles?
No. IDOR said an electric adult tricycle was outside the Illinois Vehicle Code definition of a motor vehicle. Because the reduced rate covered modifications to a qualifying motor vehicle, neither the …
Did Virginia allow a 2009 net operating loss caused by theft to be carried back three years to a 2006 individual return?
Yes. Under the historical federal rule Virginia followed, the portion of an individual's net operating loss arising from casualty or theft had a three-year carryback. Virginia's exception for elected …
Would Virginia suspend 2010 and 2011 assessments while a taxpayer continued contesting the IRS audit that produced the federal adjustments?
No. Virginia used the IRS information then available and would not independently revisit the federal taxable-income determination. The 2010 and 2011 assessments remained due and payable. If the IRS la…
How does Georgia's transportation local-option tax (TSPLOST) apply to a leasing company's motor-vehicle leases, including vehicles that move between counties or leases covering assets in several counties?
TSPLOST applies to motor-vehicle leases only where the vehicle is still subject to sales tax (TAVT not due or not paid, or short rentals of 31 days or fewer), and only to the first $5,000 of lease pay…
Does Georgia tax hotel rooms redeemed with reward points, program reimbursements to hotels, and sales of the reward points themselves?
Hotel reimbursements for reward stays were taxable consideration included in the room's sales price, whether paid out or offset against the hotel's program contributions, with no deduction for those c…
How does Georgia tax a custom sign seller when it sells a sign alone versus installing the sign as a permanent real-property fixture?
A sign-only sale was a taxable retail sale, including delivery charges. When the seller installed a sign so it became part of real property, the seller was a contractor and owed tax on the purchase pr…
Could Christina Evaro use New Mexico's one-year late-payment refund rule after filing her missing 2010 return in 2015 when wage withholding had paid the tax in 2010?
No. Evaro said she mailed a 2010 return claiming $595 in April 2011, but the Department had no record of it; even assuming receipt, she did not challenge the ensuing inaction within 210 days. Her Marc…
Could Irasema Cervantes Pettibone preserve a timely 2008 refund claim after Department inaction when she missed the 210-day challenge deadline because of disability and lack of notice?
No. Pettibone filed her 2008 return and refund claim on December 24, 2012, before the general deadline, but the Department did not act within 120 days and she did not protest or sue by July 21, 2013—t…
When does the brownfield site-preparation credit window close, and do later Phase II construction costs qualify as site preparation costs?
The site-preparation credit may be claimed for up to five tax years after the year the Certificate of Completion (CoC) issued, so a December 2013 CoC means the last year is 2018. Phase II excavation, …
Does a photographer have to charge Colorado sales tax on photos delivered digitally over the Internet rather than as prints?
Yes, taxable. Colorado treats digital photographs as tangible personal property, so a photographer must charge sales tax on them — whether delivered as prints, on a CD/DVD/flash drive, or electronical…
When one company acquires another's assets and workforce, can the buyer claim the seller's Georgia quality jobs tax credit and its carryforward?
No. The buyer (Taxpayer 2) that acquired substantially all of Taxpayer 1's assets and its entire workforce cannot claim Taxpayer 1's quality jobs tax credit or use its carryforward. Unlike some other …
What proof does an Illinois employer need to keep to show that a hired veteran was 'unemployed' for purposes of the Credit for Hiring Qualified Unemployed Veterans?
The Illinois Income Tax Act does not specify any required documentation or proof to establish that a veteran was 'unemployed' under 35 ILCS 5/217.1(b). The Department noted that as evidence of receivi…
Are fees to download and maintain prewritten software taxable in New York, and are per-order fees charged to website vendors taxable?
The software fees are taxable; the per-order vendor fees are not. Charging customers to download prewritten software is a taxable sale of tangible personal property, and the company's 'installation fe…
Is New York sales tax on a car lease due all at once, and can I get a refund if I move the car out of state?
The tax is due all at once, and there's no refund. For a motor-vehicle lease of one year or more, New York charges sales tax at the inception of the lease on the total of all lease payments for the en…
Is a flaxseed Moist Heat Pack for breastfeeding relief exempt from New York sales tax as medical equipment?
Yes -- it's exempt medical equipment. The Moist Heat Pack (a flannel pillow filled with flaxseed that can be heated or cooled and worn against the skin) is designed to treat and help prevent breastfee…
Did a married couple prove that the husband left Virginia before 2013 and the wife changed domicile to another state in April 2013?
Yes. The evidence showed that the husband was domiciled in another state throughout 2013 and spent only about 60 days working in Virginia, while the wife abandoned Virginia and began residing exclusiv…
Did relinquishing a trust instrument's power to substitute assets convert the irrevocable grantor trust into a complex trust without a court order?
Yes. The trust instrument expressly allowed the grantor to relinquish the power to substitute assets by written notice. Exercising that provision was not a modification requiring a court order or bene…
Could a parent restore a subsidiary to its Virginia consolidated return without documenting the subsidiary's Virginia nexus and source income?
Not on the record provided. The auditor removed the subsidiary because it appeared not to have Virginia nexus, and the parent failed to supply requested records showing Virginia-source income or taxab…
Does transferring an aircraft's legal title into an FAA-compliance owner trust trigger Georgia sales or use tax, when the owner keeps beneficial ownership and already paid use tax?
No. The owner moved only bare legal title to a trustee — through a revocable owner trust created solely to satisfy FAA rules for a foreign-controlled company — while keeping every right and obligation…
Were taxpayers entitled to a Virginia refund merely because they filed an amended federal return contesting an IRS audit?
No. Virginia properly assessed 2011 tax from the IRS information after the taxpayers failed to report the federal adjustment, and it would not independently revisit the IRS determination. Their refund…
Who owed Virginia sales or use tax when a retailer sold and installed a modular home, and how did the 2013 regional rates apply?
The retailer that contracted to furnish and install the modular home was the taxable real-property contractor; the resident customer owed no sales tax on the construction-service transaction. Under th…
Are a utility-scale solar facility's electricity sales for resale subject to South Carolina sales tax or electric power tax?
Electricity sold by a utility-scale solar generating facility to an electric utility or cooperative exclusively for resale is a wholesale sale, so South Carolina sales and use tax does not apply. The …
Was a California resident's February 2015 amended Virginia return timely after California changed her 2010 tax liability that same month?
Yes. Although the ordinary three-year period for amending the 2010 Virginia return had expired, Virginia law allowed one year after another state's final tax change. California disallowed its credit i…
When did a Virginia resident working and traveling abroad establish a new foreign domicile during 2012?
The taxpayer remained a Virginia domiciliary resident until August 2012, when he began leasing a home in the foreign country where he had accepted employment. Time spent traveling or temporarily carin…
Did Virginia's recomputation of a taxpayer's retirement-income subtraction produce relief for the paid 2010 assessment?
Yes. Virginia used the available records and W-2-verified contributions to recompute the allowable retirement subtraction. It reduced the paid 2010 assessment and directed a refund with accrued intere…
Could taxpayers defeat Virginia assessments by disagreeing with final IRS audit adjustments to their 2010-2012 federal income?
No. Virginia relied on the IRS's final audit adjustments and would not re-decide whether the taxpayers qualified for federal securities-trader treatment. The 2010-2012 assessments were upheld, but the…
Did a taxpayer prove he was not a Virginia resident in 2011 after ignoring requests for domicile records?
Not yet. The taxpayer said he had lived outside Virginia since 2004, but Virginia records showed later resident returns, an active Virginia driver's license, and financial documents sent to a Virginia…
Did overseas contract work make a husband a Virginia part-year resident when his family home and other domicile ties remained in Virginia?
No. The husband remained a Virginia domiciliary resident while working abroad because he kept a permanent Virginia home with his wife, vehicles and a driver's license there, and presented no evidence …
Did three months of bank statements prove that an out-of-state domiciliary spent too few days in Virginia to be an actual resident in 2010?
No. The taxpayers claimed they spent only 35 days in Virginia, but supplied bank statements for only January through March rather than the full 2010 year. Virginia upheld the presumptively correct ass…
Was a nonprofit hospital's fee for screening, testing, pasteurizing, storing, and distributing donated human milk subject to Virginia retail sales tax?
No. Virginia treated donated human milk as a self-replicating body fluid and the hospital's screening, testing, pasteurization, storage, and distribution fee as a nontaxable processing service. Becaus…
Did the Internet Tax Freedom Act exempt broadband recovery, activation, and early termination fees from Virginia communications sales tax?
No. Virginia treated the broadband recovery, service activation, and early termination fees as taxable communications services because they covered connection, cost recovery, or termination functions.…
Did the Internet Tax Freedom Act exempt broadband recovery, activation, and early termination fees from Virginia communications sales tax?
No. Virginia treated the broadband recovery, service activation, and early termination fees as taxable communications services because they covered connection, cost recovery, or termination functions.…
What audit relief did Virginia grant a food and facilities management company that disputed untaxed sales, purchases, penalties, and a local meals-tax overpayment?
Only limited relief. Virginia removed one sale covered by a customer's direct payment permit and one documented purchase, but kept the other unsupported audit items and denied penalty waiver. The comp…
Could Family Workshop deduct Medicaid counseling payments because an insurer subsidiary acted like a managed-care organization, and were older assessments time-barred?
No deduction applied. Section 7-9-93 expressly excluded services to Medicaid patients from “commercial contract services,” regardless of whether the paying subsidiary was a managed-care provider. Fami…
Did an out-of-state seller owe Florida sales tax when an out-of-state buyer directed common-carrier delivery to its Florida customer?
No. The sale between the out-of-state seller and out-of-state buyer occurred outside Florida's jurisdiction, although the Florida recipient remained responsible for collecting tax on resale or paying …
Could a municipality impose a hotel-like excise tax on nonresident patients of a nonprofit hospital?
IDOR did not decide. Local hotel taxes were generally outside its jurisdiction, so it directed the municipality to its State's Attorney and municipal preemption law. A hospital's sales-tax exemption n…
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